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Norm's Desk

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Gen Xers Not Ready for Retirement! Gen Xers: Dude, No Way.

Is this really a surprise?  Weren't GenXers (BTW, this includes me) the "slacker" generation?  Risk and Insurance has the report:

Nearly 23 percent of respondents in their 30s and 40s stopped contributing to their retirement plans because of the economic downturn, according to a recent study by Insured Retirement Institute. Another 15 percent made early withdrawals from their 401(k)s.

Interestingly enough, 78 percent of respondents said they were extremely, very or somewhat confident that they expect to have enough money to live comfortably in their retirement.

A separate report from the Investment Company Institute found that households headed by younger people are less willing to take risk with their investments. Increasing numbers of these investors are also taking out loans from their 401(k)s, though the overall number is about 30 percent.

"Folks do tend to pay back their 401 (k) loans," says Sarah Holden, ICI's Director of Retirement Research.

Unfortunately, many Gen Xers have no clue about what it will take to make their retirement years truly golden. The financial advisory and mutual fund industries have their work cut out for them. Only 37 percent of Gen Xers say they have consulted a financial advisor. That figure decreases to one-fifth among single people in their 30s and 40s.

"While three-quarters of Gen Xers have money saved for retirement, only 41 percent have tried to figure out how much money they will ultimately need to save," according to the report. "Among those who have saved, many have set aside an insufficient amount ? half of GenXers have saved less than $100,000."

Education is key to addressing the issue. Investing talk, though, makes many people's eyes glaze over. This seems to be a problem with women. IRI found that 54 percent of female Gen Xers claimed that they had "little to no investment knowledge" as did 37 percent of male Gen Xers. [BTW, this is because 20 percent of males would not admit it]

That's particularly depressing given the plethora of free financial news available on the Internet. It's important to remember, though, that the audience for this type of information is small. CNBC attracts a viewership of less than 400,000, according to the New York Times, which by is small by the standards of cable TV. These viewers tend to be well heeled, which is why advertisers like the network. Hit cable shows such as "Jersey Shore" or "Pawn Stars" attract audiences in the millions.

There won't be any trophies being handed out to GenXers at their retirement parties.  You know what else won't be there?  Social Security.

Let's get with the program guys.  Don't like the ups and downs of the stock market?  How about an indexed annuity?  That's the closest thing to a gold trophy you can get.



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